New Accounting Standard on Credit Losses:
Frequently Asked Questions
Summary:
The federal financial institution regulatory agencies (agencies) are issuing updated Frequently Asked Questions on the New Accounting Standard on Financial Instruments – Credit Losses to assist institutions and examiners. The new standard takes effect in 2020, 2021, or 2022, depending on an institution’s characteristics. The attached Frequently Asked Questions (FAQs) combine new questions and answers and those issued in 2017 and 2016, replacing the FAQs attached to FIL-41-2017. Certain previously issued FAQs have been updated in response to recent developments. The FAQs continue to focus on the application of the current expected credit losses methodology (CECL) for estimating credit loss allowances and related supervisory expectations and regulatory reporting guidance.
Statement of Applicability to Institutions under $1 Billion in Total Assets:
This Financial Institution Letter applies to all FDIC-supervised banks and savings associations, including community institutions.
Distribution:
FDIC-Supervised Institutions
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